Demographic segmentation is the simplest and by extension the most widely used type of market segmentation. Instead of creating messages that will only have minimal impact on hundreds of strangers, you have the opportunity to deliver a message that is irresistible to a smaller, but more sales-ready group. Behavioral segmentation digs deeper into customer habits than demographic segmentation. Market Segmentation helps in identifying different types of potential customer based on factors like homogeneity, distinctiveness, location or geography, trade or profession they are in, their social strata or status, etc. This process helps give you a base for creating effective advertising campaigns and designing products that are exactly what your customers are after. Market segmentation allows you to conduct robust market research into customers. B2B and B2C buyers have become so savvy that they can distinguish between genuine efforts at engagement and lazy copy-pasted campaigns. The company thus used a different marketing strategy that set it apart from other smartphone brands in the market. There are four key types of market segmentation that you should be aware of, which include demographic, geographic, psychographic, and behavioral segmentations. Key demographic traits include: Geographic segmentation is all about location. While this may seem similar to behavioral segmentation, it’s worth noting that psychographic segmentation only deals with the psychological aspects of consumers. Now, you know what market segmentation is, why it’s important, and the four types of market segmentation. Market segments can be established using three general criteria: Homogeneity — common needs within a segment; Distinction — uniqueness from other segments Psychographic variables are popularly referred to as IAO variables which stands for interests, activities, and opinions. Market segmentation, essentially, is the process of dividing a large market (consisting of both potential and current customers) into smaller groups of customers (referred to as segments) on the basis of shared characteristics. You can talk about your cleaning services in general, but what would really impress these two types of audiences is mentioning aspects of your service that they would identify with, such as using pet-friendly cleaning products or providing a complimentary after-party clean up. This information can also be used to cultivate a brand personality that’s aligned with the company’s consumers. Book a free demo with us today and start segmenting your customer base in the easiest way possible. DEMOGRAPHIC SEGMENTATION Demographic segmentation divides consumer segments on the basis of variables like age, race, gender, income, education, occupation, generation, family size, religion, nationality , etc. Crossing The Chasm, by Geoffrey Moore. Instead of spending hundreds of dollars and countless man-hours trying to create the perfect email for your customer base, market segmentation compels you to develop a more targeted marketing series that’s tailored specifically to the different types of market your business is involved in. We’re a strategy, business & marketing resource. This is probably the most popular market segmentation out there. With the help of segmentation, companies are able to cater to needs and requirements of each group appropriately. In this marketing segmentation, marketing professionals segment customers based on their: Most marketing professionals are adamant that using behavioral segmentation is among the best ways to build market segments. For instance, did you know that Kit-Kat in Japan offers a plethora of wacky flavors (including wasabi and green tea flavor!) For example, water might be scarce in some regions which inflates the demand for bottled water but, at the same time, it might be in abundance in other regions where the demand for the same is very less. Segmentation is the first step of the process. When you know whom you’re talking to, you can develop stronger marketing messages. Leveraging all four will help any business stay on top of customer demands and effortlessly meet evolving expectations. This type of market segmentation is comprised of behavior patterns, like customer loyalty or engagement level. Geographic segmentation divides the market on the basis of geography. Below are the four main methods of market segmentation. Market segmentation is a process of dividing a heterogeneous market into relatively more homogenous segments based on certain parameters like geographic, demographic, psychographic, and behavioural. Market segmentation process essentially involves grouping and sub-grouping large homogenous markets into clearly identifiable segments. Modern marketing is all about selling the right thing, at the right time. Now you’re probably wondering why marketers should put in all this effort in the first place. Marketing segmentation is marketing strategy that involves dividing a broad target market into subsets of consumers who have common needs, wants, demand, or characteristics. The success of any segmented marketing campaign depends on the company’s ability to find and target the right segments. Segments are created based on observable or reported customer data pertaining to the individual consumer such as age, gender, … The beauty of market segmentation is that it’s infinitely repeatable; you can easily customize campaigns and break them further into more specific groups. Well, the fact is, classifying different groups’ makes it easier for marketing professionals to create personalized campaigns. Is the market large or small? Create stronger marketing messages. It’s time to put this information into practice. At the end of the day, customers will always go to the seller who understands them. Demographic Segmentation. Types of Market Segmentation. consumer product or service product and marketing goals. By performing marketing segmentation, you can provide straightforward value propositions and relevant information to potential customers. Enter your email address below to subscribe to my newsletter. Types of Market Segmentation Strategies. Eight Benefits of Market Segmentation. Out of the four market segment types, psychographic data is the hardest to extract because your target audience won’t readily reveal their preferences. It is simple to use and understand, is readily accessible through common data gathering methods , and it can eliminate irrelevant audience segments quickly and easily. Here, marketers can segment the people according to the geographic criteria such as nations, states, regions, countries, cities, postal codes or neighborhoods. Get personal with your campaigns. The most competitive marketing strategies are driven by targeted advertising and messaging. Overview of the STP Process. No matter how comprehensive your solution is, not every customer will be able to perceive the benefits right away. You could take a broad category like computers or tap into specific niche’s like windows tablets. Psychographic segmentation is a legitimate way to segment a market, if we can identify the proper segmentation variables (or lifestyle statements, words, pictures, etc.). Demographic Segmentation 2. These groups are formed based on similar characteristics. The entire market of a production may be segmented on geographic basis. When you add psychographic data into the equation, you might realize that people sign up with your facility because they value community classes and enjoy training with groups. Usually combined with geographic segmentation, demographic segmentation is one of the most popular segmentation types used by companies. Market Segmentation Definition. Market Segmentation and Personas. A market segment can easily be broken down into more specific segments that could lead to new opportunities. You can also create more niche segments within the types below. Fortunately, there’s a practice in place for customizing your marketing efforts. Only after this can he/she craft the perfect marketing strategy. Demographic factors are the most popular bases for segmenting … To determine a customer’s transaction… 1. The best way to do this is through customer segmentation.. What is customer segmentation? Best example is clothes which are different based on the age of the individual. 3. Geographic market segmentation can be done based on boundaries such as a country or a specific ZIP code, or based on the type of area with respect to the climate or urbanization. Market segmentation divides a market into well-defined slices. However, instead of looking at your customer’s age, gender, and marital status, this segment type is focused on psychological attributes and how they drive a sale. Previous blindspots that you may have had with customer service can be resolved by performing segmentation in marketing. 1. Have something that you’d like to ask? Commence CRM is a full-suite CRM solution for businesses of all sizes. Demographic Segmentation. Types of marketing segmentation. 1) Demographic segmentation. Type above and press Enter to search. Geographic Segmentation. This allows marketers to be more efficient in terms of company resources, their time and of course, budget. The 4 Types of Market Segmentation 1. Demographic segmentation: This is one of the most widely used and simplest types of market segmentation. Use the following market segmentation process to learn about your audience and find new marketing and product opportunities. Best Green Tea Brands in the world in 2020: What makes them the best? There are four main types of marketing segmentation strategies. Types of marketing segmentation. With this information, your shop can expand into weekend bags, customized leather organizers, and other leather goods your current shoppers can gift or recommend to their family members. With this ideology, Nike and Reebok have penetrated the market strongly for their sports shoes. Market segmentation doesn’t just help you identify existing markets – it could also potentially uncover new markets to expand into. Taking the time to perform a segmentation of market characteristics will also enhance different aspects of your business: How much do you spend on marketing campaigns and how much value do you receive in return? A more personalized approach leads to higher conversion rates because you are no longer discussing general problems; you are addressing immediate concerns and needs they may have. This technique allows you to send out hyper-personalized emails or ads to the right people. As mentioned earlier, STP stands for segmentation, targeting, and positioning. Hurree makes market segmentation better with one platform. Learn how your comment data is processed. It is simple to use and understand, is readily accessible through common data gathering methods , and it can eliminate irrelevant audience segments quickly and easily. “Market segmentation consists of taking the total heterogeneous market for a product and dividing it into several submarkets of segment each of which tends to be homogeneous is full of significant aspects.” – William Stanton. When using this type of market segmentation, professionals must primarily focus on trying to understand the customer on a psyche level. Alternatively, looking at it from a service perspective you could consider a broad category like auto repair, but specifically target it to brake and muffler distributors. What are the types of market segmentation? Corporate Headquarters 2 Industrial Way West 2nd Floor Eatontown, NJ 07724, DISCLAIMER | PRIVACY POLICY GDPR COMPLIANCE | TERMS OF USE. With segmentation and targeting, you want to understand how your market will respond in a given situation, like purchasing your products. Ultimately, segmentation is about getting to know your audience and figuring out other ways to fulfill a need or provide for a certain niche. How to Persuade Your Team to Adopt New Technologies Like CRM →, Local businesses that are within a certain area or radius, Classification of an area: is it rural, urban, or suburban. Consumer activities – Adidas, Reebok and Nike all market based on one consumer activity – Staying physically fit. As the name indicates, this type of market segmentation divides potential consumers on the basis of geography. Age Group (10 - 20 years) - … What is Hurree? In a world where consumers are bombarded with ads and emails, sending a message that gets their attention is the key to beating your competitors. The different types of segments are mainly concerned with two aspects: 1. With segmentation and targeting, the researcher aims to understand the likelihood that a given respondent or segment will exhibit a specific desired behaviour. Demographic is one of the most common segmentation types used in market research (alongside geographic). The four key types of Market Segmentation are illustrated below: 1. It involves splitting up your target consumers into variables such as: These variables make it easier for marketers to divide consumers into a number of groups. Market segmentation is a process of dividing the entire market population into multiple meaningful segments based on marketing variables like demographics (age, gender etc), geographic, psychographics (lifestyle, behavior) etc. For a more detailed analysis, marketers could also look into other geographic segmentation traits such as: When used proactively, geographic segments can be studied to answer the following questions: Geographic segmentation is especially useful for a business with a global presence. Now more than ever, buyers are expecting some form of personalization when dealing with businesses. To pull off psychographic segmentation, marketers can either create an approximation of their buyers by developing a buyer persona or engage in relationship-building tactics that can slowly reveal unmeasurable, qualitative data about your consumers. For instance, countries that only have two seasons (wet and dry) may find no use for winter clothes or winter accessories. For instance, you probably already know that Blackberry was designed to cater to business professionals. Demographic segmentation divides a market through variables such as age, gender, education level, family size, occupation, ethnicity, income, and more. This type of market segmentation is important for marketers as people belonging to different regions may have different requirements. Whereas B2Cs might find tracking personal traits more beneficial, B2Bs will often look into traits based on the company or organization as a whole. There are different tools available that can help you consolidate this much data into usable information. Companies use it to create broad groupings of the population based on things such as age, sex, location, religion, family size, etc. As the name indicates, this kind of marketing segmentation is used to describe human characteristics of potential consumers. What Are the 4 Types of Market Segmentation? What is demographic segmentation? The benefit segmentation is a form of market segmentation based on the differences in specific benefits that different groups of consumers look for in a product. When the segmentation is by Demography, there are 9 types of target market possible. Market segmentation is an extension of market research that seeks to identify targeted groups of consumers to tailor products and branding in a way that is attractive to the group. Market segmentation is a sound marketing practice, because it allows you to target your sights on specific areas of the market that are the most lucrative for your business. It’s also one of the most popular customer profile types to be integrated into marketing campaigns. Market segmentation splits up a market into different types (segments) to enable a business to better target its products to the relevant customers. How to get started with segmentation. You c an learn the basics of it in the book that become the bible for startups 25 years ago and it’s still valid. Marketing segmentation is the practice of identifying groups of people for a target market or target audience. Behavioral. It is one of the simplest methods of market segmentation. The study also found that 76% of the surveyed customers were likely to do business with companies offering personalized online experiences, whereas 97% were likely to do business with companies offering offline personalized experiences. By breaking down the company’s target market into segmented groups, marketers don’t have to waste time in targeting each potential customer. Age – The target market can be on the basis of age. In fact, it practically acts as a blueprint when coming up with effective marketing campaigns. Thereby isolating customer experience, developing potential loyalty programs and product development innovation. In many cases, a predictive model may be incorporated into the study so that you can group individuals within identified segments based on specific answers to survey questions. At the very basic level, it is concerned with identifying consumers based on their geographical location, such as a person or organization’s country, state, city, and zip code. Market segmentation is the process of grouping buyers together based on their attributes. 1. For a focused marketing program, market segments should be based on certain clear-cut variables, like geographic, demographic, psychographic; behavioural, value … 2. Large markets like the fitness market use psychographic segmentation when they sort their customers into categories of people who care about healthy living and exercise. What are the traits associated with a specific geographical location? When you market to the right segment, you will see improved conversion rates because you are using the exact language they want to hear. Taking the time to isolate your buyers and create individualized, targeted campaigns can be laborious, but worth it. Demographic segmentation is one of the most standard types of market segmentation. To offer a better sense of which types of segmentations apply to specific business situations, we conducted an unscientific “segmentation of segmentation types.” Here are a few illustrative examples to help you understand which segmentation type may be right for your business situation: Behavioral Segmentation 4. We hope this guide has answered your queries regarding market segmentation types. As per the name suggests, this kind of market segmentation is based on location. Thus, if we want to plan a good customer segmentation and targeting strategy, we need to focus on 4 types of market segmentation. What types of market segmentation are there? For instance, you can use market segmentation to isolate leads in different phases of your sales funnel, and create campaigns based on what specific segments need. Types of Market Segmentation Process are as follows: 1. Demographic is one of the most common segmentation types used in market research (alongside geographic). Types of Market Segmentation. A brand cannot satisfy every type of buyer. 2. When working with a CRM, make sure that it has the right tools to track and analyze customer data. This process leads to the best Return-on-Investment (ROI) outcomes. Let’s say you’re selling handmade leather bags online for middle-aged men. Market segmentation is the process of dividing prospective consumers into different groups depending on factors like demographics, behavior and various characteristics. In it, the regional differences in terms of topography, climate, population and its density may be considered as the base for market segmentation. Tracking this is crucial because the marketing messages that work best with consumers in the U.S. might not work so well with consumers in South East Asia. Learn about the 4 most common types of market segmentation, plus some other ones that you may have missed. Getting to know your consumers becomes much easier using various market segmentation types. Customer segmentation is the process of separating your customers into groups based on what certain traits (e.g. A market segment is a group of people that have two things in common. The first step is understanding the types of segmentation that are out there and how you can use each one. What is the best kind of media to use when engaging local audiences? Here, marketing manager can segment the market based upon quality, performance, customer service, special features, or other benefits. For example, an automotive company can split customers into two categories: price-sensitive and price-ins… So, to better serve the market and have high sales numbers, market segmentation is necessary for any brand. In this type of market segmentation process, … Delivering a personalized brand of service is just one of the many benefits of taking the time to create your market segment. Market Segmentation Definition. This site uses Akismet to reduce spam. Demographic segmentation is one of the simplest and most widest type of market segmentation... 2) Behavioral segmentation. 4 types of Market segmentation and how to segment audience with them? In this type, the consumer market is segregated based on demographic elements such as qualification, salary, gender, marital status, nature of work, age, no of family members, gender, nationality, race, … For example, water might be scarce in some regions which inflates the demand for bottled water but, at the same time, it might be in abundance in other regions where the demand for the same is very less. Learn about the 4 most common types of market segmentation, plus some other ones that you may have missed. Attract (and convert… The 4 primary market segmentation types are integral to any marketing strategy, and for any brands looking to see continued success. Overall, customer segmentation and targeting allow you to create unique marketing strategies for your customers based on their preferences. 2. This form of segmentation is widely used due to specific products catering to obvious individual needs relating to … As the name indicates, market segmentation is the process of classifying potential buyers into a number of segments or groups based on certain characteristics. Here are several more methods you may want to look into. This is incredibly important as customer needs are likely to vary depending on location, especially if you compare rural and urban areas. Customer market segmentation will force you to identify your audience and engage with profitable, probable leads while filtering out the rest. This is quite unlike other clothing brands that cater to working women who are always on the go. If you’re struggling to delve into the formalities of segmentation, or perhaps you want a little more pre-segmentation guidance, look into the M.A.S.D.A. You know what market segmentation process essentially involves grouping and sub-grouping large markets. 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